Securing Supply Chain Data with Advanced Encryption

A look at the most common encryption techniques and best practices for applying them.


In modern manufacturing, every component and raw material used to make the products we use daily is tracked digitally from the source until it reaches the customer. However, with this reliance on digital systems, the manufacturing supply chain has become a lucrative target for cyberattacks, which often result in devastating consequences.

The infamous NotPetya cyberattack, for instance, caused billions in financial losses for multinational companies like Merck, Mondelez, and Maersk, crippling their operations worldwide. However, the digitization of manufacturing processes won’t stop. Already, stats show that by 2035, the manufacturing industry will gain $3.8 trillion by adopting AI. This continued dependence on external systems will only intensify the potential risks of cyber attacks on the manufacturing supply chain.

Encryption is a powerful data security technique that transforms readable data into an indecipherable code that requires a unique decryption key to access. This way, even if someone intercepts the data, they can’t read it unless they have the correct key. Here are the most common advanced encryption techniques manufacturers can use to protect confidential supply chain data from prying eyes and malicious actors:

Symmetric Encryption

Symmetric encryption relies on a single shared key to encrypt and decrypt data. This key must be securely exchanged between the communicating parties before any encrypted transmission can occur, making the method straightforward, but reliant on secure key distribution. Some commonly used symmetric encryption algorithms include the Advanced Encryption Standard (AES), the Data Encryption Standard (DES), and its stronger variant, Triple DES (3DES). 

Manufacturers can use symmetric encryption to protect supply chain data like confidential product designs, sensitive financial information, and other proprietary data they share with their trusted partners. Symmetric encryption can secure data stored in databases or as it is transmitted between manufacturing sites and suppliers. 

Since it relies on a single shared key, symmetric encryption offers speed and computational efficiency, making it suitable for encrypting large volumes of data. However, the reliance on a shared secret key can also be a limitation, as secure key exchange and management become critical challenges, especially in large and distributed supply chain networks. If the key is exposed, there’s a risk of massive data compromise. 

Asymmetric Encryption

Asymmetric encryption, also known as public-key cryptography, uses a cryptographic pair of keys – a public key for encryption and a private key for decryption. Only the holder of the private key can decrypt the data encrypted with the corresponding public key. This approach eliminates the need for a shared secret, as the public key can be freely distributed. 

Common asymmetric encryption algorithms include the Rivest-Shamir-Adleman (RSA) algorithm and Elliptic Curve Cryptography (ECC), both of which leverage the computational complexity of mathematical problems to secure data. In the manufacturing supply chain, asymmetric encryption is commonly used for secure data exchange between parties without a pre-established trusted relationship, such as during blockchain-related operations, initial contract negotiations, or when onboarding new suppliers. 

Asymmetric encryption offers enhanced security for data exchanges over unsecured channels and eliminates the need for secure key distribution. Unfortunately, it typically involves higher computational overhead and can be slower compared to symmetric encryption, particularly for large data sets.

End-to-End Encryption

End-to-end encryption (E2EE) is a comprehensive approach that ensures data remains encrypted throughout its entire journey, from the sender's device to the recipient's device, with no intermediaries capable of decrypting the data. Unlike the other encryption methods, where decryption happens on the server, E2EE only decrypts data on the recipient’s device. This makes it highly effective in protecting data during transmission.

Examples of end-to-end encryption protocols include the Signal Protocol, used in messaging applications like WhatsApp and Signal, and Pretty Good Privacy (PGP), commonly used for secure email communication. In supply chain networks, E2EE is a great way to secure sensitive data as it traverses multiple points along the chain. It ensures that only the intended parties can access and decrypt the information. 

While it offers robust security, E2EE can be challenging to implement and manage at scale, particularly in complex supply chain ecosystems with numerous stakeholders and varying levels of technical expertise.

Supply Chain Application Challenges

The issue with encryption protocols is that they’re often designed and most commonly used in cloud computing or other purely digital environments. Evidently, this can pose issues when applying them to supply chains. Manufacturers should start by taking a proactive approach, conducting a thorough data audit and classifying information based on its sensitivity level. After all, not all supply chain data is sensitive enough to demand resource-intensive encryption. 

This can include product designs, formulas, intellectual property, production processes, quality control measures, and inventory levels. Financial records, contracts, and agreements with suppliers and vendors also fall under this category. With the vast amounts of data involved in modern supply chain operations, manually classifying and cataloging sensitive information can be daunting and error-prone. However, with AI-aided tools that allow you to chat with PDF files and other documents, manufacturers can automatically analyze and categorize supply chain documents based on their content sensitivity. 

As data traverses the complex web of supply chain networks, it becomes vulnerable to interception and unauthorized access. One way to secure it as it moves between different points is to implement end-to-end encryption for communication channels, such as email, messaging platforms, and video conferencing systems. This ensures only the authorized recipient can access and read the data.

Using secure file transfer protocols that incorporate encryption, such as SFTP or FTPS, when exchanging large files or data sets with partners and suppliers can also prevent data breaches during transmission. Manufacturers can also provide an additional layer of protection for supply chain data in transit by using Virtual Private Networks (VPNs) to create encrypted tunnels for secure communication over public networks. 

Securing Data at Rest

Even when data is stored or at rest, it remains susceptible to unauthorized access and theft. Encrypting databases and storage systems where supply chain data resides, such as cloud storage or on-premises servers, ensures the data remains unreadable to unauthorized parties even if these systems are compromised.

Since most supply chain data collected is likely parsed through ERP software, even processes like SAP staff augmentation can directly impact the security of this data. Therefore, manufacturers need to make sure all employees involved in the supply chain – including external staff – understand the importance of data security, recognize potential threats to the supply chain as a whole, and adhere to established data storage and security protocols.

It’s also important to implement effective encryption management strategies to maintain the security of encrypted data. This means regular key rotation, secure key storage, as well as strict access controls for key management systems.

Robust access control and authentication mechanisms are vital components of an effective encryption strategy, as they govern who can access and interact with sensitive supply chain data. Manufacturers should put in place role-based access controls to ensure individuals only have access to the data and systems necessary for their specific roles and responsibilities within the supply chain.

Additionally, requiring additional authentication factors, such as biometrics or one-time passwords, in addition to traditional passwords, adds an extra layer of security and reduces the risk of identity-based attacks by a significant margin. Using internally-built QR code generators for biometric or device authentication can also boost security. For example, a user might scan a QR code to initiate a login and then complete the process by providing a fingerprint or facial recognition on their mobile device.

Finally, identity and access management (IAM) systems can also centralize and streamline user identity, access rights, and authentication process management. 

In an era where sensitive supply chain information flows as freely as the goods themselves, the need for robust encryption measures can no longer be ignored. Manufacturers need to adopt the encryption techniques we’ve covered above to protect their supply chain data in transit, at rest, and throughout its entire lifecycle. Beyond implementing these encryption methods, it’s also important for manufacturers to stay updated with the latest advancements in encryption techniques. After all, the threat landscape is still evolving. 

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